Recession serves up tax trouble for more Greater Lowell restaurants

By Dennis Shaughnessey, Lowell Sun

The economic downturn has left some local restaurants struggling to pay state meal taxes.

And the bills are piling up.

According to Robert Bliss, a spokesman for the Department of Revenue, the state is owed $91.5 million in meal taxes — now 5 percent of every customer’s bill.

The list of meal-tax delinquents, compiled weekly by the business newspaper Banker & Tradesman, has held steady since Jan. 1.

Dracut Selectman Robert Cox, who owns Coyle’s Roadhouse Tavern on Broadway Road, admits his business has suffered dramatically over the past year, causing him to fall behind in meals-tax payments to the state. At one point, he owed $57,225 in meal-tax payments, including interest and penalties.

Cox said he has worked out a payment plan with the DOR and Coyle’s was recently taken off the DOR list, indicating that his debt has been paid off. But business remains difficult.

Cox, who bought the tavern with his wife, Leslie, seven years ago, said things began looking bad about a year ago. Business slowed during the summer, the recession hit, and road construction rerouted traffic away from Coyle’s.

“It was like a snowball going down a hill,” said Cox.

Other local restaurants and related businesses that owe meals taxes include:

* Europa Cafe, Lowell, $40,647.

* Gem Restaurant Group, Dracut, $10,556.

* Smithwick’s, Lowell, $350,000.

* Lowell Donut Co., Tyngsboro, $47,832.

A message was left at Cafe Europa, but was not returned.

Owners of Gem, who operate Good Olde Yum Yum in Dracut, could not be reached for comment.

Smithwick’s, formerly located on Middle Street in Lowell and owned by CTC Properties, closed more than five years ago.

There is no listing for CTC Properties.

Neither is there a listing for Lowell Donut Co. of Tyngsboro.

“As far as historic information on sales-tax receivables, we have not tracked it in the past,” Bliss said, adding that the tax-delinquent list is updated weekly and is available at the DOR Web site.

At the height of their financial problems, the DOR placed a levy on Coyle’s operational account and took all the restaurant’s credit-card receipts.

“That was about half of what we made,” said Cox. “We’ve been struggling to get by on half our gross receipts. It’s nearly impossible.”

Cox sought the assistance of tax attorneys and soon began seeing light at the end of the tunnel.

But business is not getting any better. On a good day, particularly on the weekend, Coyle’s could pull in $4,000.

“I can’t remember the last time I saw $4,000,” Cox said.

Leslie works almost full time in the kitchen or waiting tables just to keep payroll costs down. The couple has not taken a steady paycheck since October.

“That’s what you do,” Leslie says. “You work hard. You just keep going. We’ve always kept our prices low so it’s affordable to everybody.”

Cox said that as a selectman, it’s easy to feel embarrassed about owing so much money to the state.

“It eats away at you,” he said. “I wish it was different, but it isn’t. We’ve paid almost all of it back and we plan to stay out of debt. We have no option. We’ll kick and claw to stay out of the hole. Everything we have is tied up here. … We never hid from it.”

Ten on state’s tax-debt list:

Of the 37 Greater Lowell businesses on the Department of Revenue’s list of tax delinquents, 10 are eateries that are behind on paying their meal taxes.

The 10 businesses listed owe more than $25,000.

* Ciros of Maynard, Littleton, $506,787 (woman who answered the phone said it was the wrong number).

* CTC Prop. Smithwicks, Lowell, $348,152 (phone no longer in service).

* Millbrook Farm, Concord, $79,276 (phone no longer in service).

* Chef’s Table, Wilmington, $70,548 (person who answered the phone said Chef’s Table no longer exists).

* Northmeadow, Tewksbury, $54,579 (phone no longer in service).

* Lowell Donut, Tyngsboro, $47,832 (no listing for this company).

* Europa Cafe, Lowell, $40,647 (no answer).

* Ma’s Kitchen, Pa’s Parlor, Tyngsboro, $33,577 (no longer in business).

* Pang Voeuth, Lowell, $32,526 (phone no longer in service).

* Gem Restaurant Group, Dracut, $10,556 (left message, no return phone call).